{"id":571,"date":"2008-02-01T13:27:40","date_gmt":"2008-02-01T18:27:40","guid":{"rendered":"http:\/\/www.danziger.com\/articlesnews\/?p=37"},"modified":"2008-02-01T13:27:40","modified_gmt":"2008-02-01T18:27:40","slug":"til-death-do-us-art","status":"publish","type":"post","link":"https:\/\/danziger.com\/?p=571","title":{"rendered":"‘Til Death Do Us Art"},"content":{"rendered":"

What happens when a couple’s passion fades for each other but still burns for their art collection?<\/strong><\/p>\n

DEAR BROTHERS-IN-LAW: Last Valentine\u2019s Day my husband served me breakfast in bed. This year his attorney served me with divorce papers. What\u2019s up with that? \u2014Sincerely, Mystified on Madison.
\nDEAR MISTY: Call us for an appointment, and bring a retainer check.<\/p>\n

A week after her e-mail, Misty and her soon-to-be ex, Andre, came in to discuss how splitting up would affect their extensive art collection. We know just enough matrimonial law to be dangerous\u2014divorce, the saying goes, is a lawsuit to determine who gets custody of the money\u2014so we advised them to bring along separate divorce attorneys and we would help mediate.<\/p>\n

In New York and most other U.S. states, the general rule is well settled: Items acquired during a marriage (\u201cmarital property\u201d) are distributed equitably between spouses, whereas those acquired before marriage or through gift or inheritance (\u201cseparate property\u201d) generally remain separate. When it comes to property like art, however, the application of this rule isn\u2019t always so straightforward.<\/p>\n

In our case, Andre began the meeting on a slightly antagonistic note, calling his wife a scheming witch and declaring that all appreciation on their collection was marital property. One painting in particular\u2014a Roy Lichtenstein image of two lovers that Misty had bought years before their marriage\u2014had increased in value by $1 million, and Andre wanted half of that increase, in cash. Misty\u2019s attorney objected. The painting was clearly separate property, he said, and since the appreciation in value was \u201cpassive,\u201d meaning it was achieved without any action by the spouses, it should go to the titled owner\u2014here, the wife.<\/p>\n

Andre\u2019s lawyer fired back with the seminal 1986 case Price v. Price, in which the New York Court of Appeals held that \u201cwhere separate property of one spouse has appreciated during the marriage . . . \u2018due in part\u2019 to the contributions or efforts of the nontitled spouse as parent and homemaker, the amount of that appreciation should be added to the sum of marital property for equitable distribution.\u201d The attorney argued that Andre had made important \u201ccontributions and efforts\u201d in having advised his wife not to sell the painting too soon.<\/p>\n

According to New York divorce attorney Allan D. Mantel, a judge weighing the Lichtenstein in question would likely consider factors such as \u201cthe expertise and training of the advising spouse; whether buying, selling or collecting art was a regular activity of the parties; and the manner by which the art was acquired\u201d\u2014for example, whether it was inherited or purchased with separate assets.<\/p>\n

After much bickering, the two matrimonial attorneys left the issue of the Lichtenstein unresolved, and we then discussed an iconic Jim Dine heart painting purchased at Christie\u2019s during the couple\u2019s honeymoon in Europe. Misty wanted the heart (\u201csince Andre has no brain\u201d) and reminded her husband that she had bought it in her own name with funds from her own bank account. Andre\u2019s lawyer balked, saying his client had accompanied Misty to the auction and that it was thanks to his \u201cgreat eye\u201d that she made the purchase at all. Misty reluctantly agreed to sell the picture and share the proceeds.<\/p>\n

Next, the couple turned their attention to a Robert Indiana \u201clove\u201d sculpture. Andre claimed that it was his alone because he had just received it as a birthday present from his father-in-law. \u201cNot so fast,\u201d responded Misty\u2019s lawyer. (\u201cYou can\u2019t hurry love,\u201d we hummed.) While conceding that items obtained by gift from someone other than the spouse are separate property, he shrewdly requested proof that the sculpture was in fact a gift. New York law presumes that everything acquired during marriage is marital property, and anything separate must be proved as such. Luckily for Andre, he had compelling evidence\u2014a birthday card\u2014that the work was indeed a present. As for the Schiele nude that Misty had given him for their first anniversary, this would be considered marital property, even though it was purchased with her money.<\/p>\n

The lesson here: In a divorce it\u2019s important to have proper documentation that shows how and when art was acquired, and the party with the more complete paperwork usually wins. Usually, but not always. Misty\u2019s attorney observed that the birthday card thanked Andre for his \u201cinvaluable advice on my art collection.\u201d In the lawyer\u2019s view, this meant that the sculpture wasn\u2019t really a gift but simply payment in kind for art consulting services. Under the law, a gift loses its character as a gift\u2014and therefore becomes a divisible marital asset\u2014if it is given in return for services. The issue remained unresolved, but the parties at least agreed on one thing: love was now for sale.<\/p>\n

The mood in the room heated up when the two focused on the portion of the collection that they managed to agree was marital property. The issue now was how to split up these works in an equitable manner, which in turn raised the question of how to value the collection. Because the major auction houses don\u2019t like to be caught in the middle of marital battles, they will generally offer a divorce appraisal only if the parties agree not to contest the final estimate. Since Andre and Misty could hardly agree on anything, we suggested using an art adviser to value the works instead.<\/p>\n

Next they discovered that they each wanted exactly the same pieces. This wasn\u2019t surprising, since divvying up an integrated art collection can be challenging even among friendly parties\u2014and friendly did not begin to describe our couple, who were now glaring at each other across the table.<\/p>\n

Rather than have Andre and Misty recreate a scene from the movie The War of the Roses, we suggested a more Solomonic solution, borrowed from third-grade gym class: a system of alternating picks. This is what happened in the famous 1983 New York State Supreme Court case Scull v. Scull, involving taxi fleet tycoon Robert Scull and his wife, Ethyl. The judge ordered the couple to divide their Pop art collection equally, on the basis of a Sotheby\u2019s appraisal. Each party took turns selecting works from a vast central warehouse space, filling up \u201chis\u201d and \u201cher\u201d rooms. After much to-and-fro, Andre and Misty finally settled on this approach.<\/p>\n

As we discussed dividing the couple\u2019s collection, a final complication arose. Andre, an accomplished amateur artist, did not want to part with any works that he himself had painted during the marriage. Misty not only insisted on a division of the \u201chideous little paintings\u201d but demanded a half interest in their copyright, \u201con the remote chance they are ever worth more than a nickel.\u201d<\/p>\n

In support, her attorney referred to a groundbreaking case in 2000, Rodrigue v. Rodrigue, between the artist George Rodrigue and his wife of almost 30 years, Veronica. The Fifth Circuit Court of Appeals ordered George Rodrigue, who had created the wildly successful \u201cBlue Dog\u201d image used to sell products ranging from Xerox copiers to Absolut vodka, to give Veronica a half interest in the net economic benefit from copyrighted works that he produced during their marriage. Not surprisingly, Andre\u2019s attorney balked at the copyright request, which was tabled for further discussion.<\/p>\n

By the end of the meeting, we understood why divorce is so expensive: because it\u2019s worth it. Fortunately, Misty and Andre eventually did manage to divide their collection, living happily ever after. Happily, but separately.<\/p>\n

Some facts have been altered for reasons of client confidentiality or, in some cases, created out of whole cloth. Nothing in this article is intended to provide specific legal advice. Charles and Thomas Danziger are the lead partners in the New York firm Danziger, Danziger & Muro, specializing in art law.<\/p>\n

“‘Til Death do us Art” originally appeared in the February 2008 issue of Art+Auction.<\/em><\/p>\n

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What happens when a couple’s passion fades for each other but still burns for their art collection? DEAR BROTHERS-IN-LAW: Last Valentine\u2019s Day my husband served me breakfast in bed. This year his attorney served me with divorce papers. What\u2019s up with that? \u2014Sincerely, Mystified on Madison. DEAR MISTY: Call us for an appointment, and bring … <\/p>\n

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